WASHINGTON, D.C. – Maryland consumers will have less access to professional financial advice, insurance products and investment products under proposed legislation that imposes sweeping, ill-defined burdens on financial advisors, according to the Insured Retirement Institute (IRI), the leading trade association for the retirement income industry.

In testimony before the Maryland House and Senate today, IRI expressed opposition to the proposed legislation and instead urged lawmakers to work with federal regulators and within a process through the National Association Insurance Commissioners (NAIC) to achieve regulatory consistency and a “shared goal of requiring financial professionals to act in the clients’ best interest.”

“IRI has long-supported the creation of a workable best interest standard for financial professionals that will effectively protect investors against bad actors without unduly restricting investors’ ability to access the products and services they need to achieve their financial goals,” said Jason Berkowitz, IRI Chief Legal and Regulatory Affairs Officer. “We have urged each and every policymaker to participate in a constructive dialogue with other interested regulatory bodies to establish consistent and clear standards for recommendations made with respect to all securities and insurance products.”

The U.S. Securities and Exchange Commission (SEC) has a pending proposed regulation to enhance the standard of conduct applicable to broker-dealers under federal securities laws. A final regulation is anticipated this summer.

“We believe the SEC is the appropriate federal regulator to lead the development of a standard of conduct consistent with the principle that financial professionals should be required to act in their clients’ best interest when providing personalized investment advice, while also preserving consumer choice and access to the products and services they need to achieve their financial goals,” Berkowitz said.

Berkowitz also said that that NAIC has been working to develop enhancements to its Suitability in Annuity Transactions Model Regulation for more than a year. The NAIC has indicated that its effort is aimed at development of modifications to its model to use for meaningful engagement with the SEC. NAIC leadership has further intimated that the NAIC is unlikely to adopt final modifications to the NAIC Model prior to final adoption of the SEC proposal.

IRI said that Maryland policymakers should collaborate with the SEC in its effort to develop appropriate, cohesive, and workable standard of conduct rules, but should not create additional regulatory layers until the SEC completes its national standard.

“As you consider how to move forward, we respectfully urge you to consider how Maryland’s proposed legislation will fit within the broader tapestry of regulations governing the conduct of financial professionals. We hope you will recognize the benefits of participating in these efforts and allowing time for them to play out so as to avoid the creation of duplicative, conflicting, or incompatible rules which could deprive Americans of access to valuable financial products and services,” Berkowitz said.